(i) ANNUAL SUPPLEMENTAL RENT ADJUSTMENT: upwards by
 the Annual Supplemental Rent Adjustment commencing
 on January 1, 2005 and each annual anniversary
 date thereafter; and

 (ii) HOUR TO CYCLE RATIO ADJUSTMENT: Lessor and Lessee
 acknowledge that the Engine Supplemental Rent Rate
 is based upon the assumption that the Aircraft
 will operate on the Assumed Ratio. If that
 assumption proves to be incorrect at any time for
 any period of twelve (12) consecutive months
 during the Term based upon Lessee's actual
 operating experience during such twelve (12)
 months, and in the case of the Assumed Ratio the
 hour to cycle ratio differs from the Assumed Ratio
 by more than 0.1 during such twelve (12) month
 period, (i) Lessor shall have the right, upon
 written notice to Lessee, to adjust the Engine
 Supplemental Rent Rate (in the case of a decrease
 in the ratio below the Assumed Ratio) and (ii)
 Lessor will make that adjustment (in the case of
 an increase in the ratio above the Assumed Ratio)
 in respect of Engine Supplemental Rent payable for
 the next year of the Lease Term. The Engine
 Supplemental Rent Rate shall be adjusted by

 48


 calculating the actual engine hour to cycle ratio
 for the applicable 12-month period and using that
 to select the corresponding Engine Supplemental
 Rent Adjusted Value adjustment dollar figure from
 the Assumed Ratio Adjustment Table in Schedule 7.
 If actual hour to cycle ratio falls outside the
 specific ratios set forth in the Assumed Ratio
 Adjustment Table in Schedule 7, then the Engine
 Supplemental Rent Adjusted Value shall be
 determined by extrapolating (or interpolating)
 from (or between) the nearest observed values in
 the table.